Nowhere in the West is there a region as obsessed with the possibility of a future water shortage as Southern California. Water is so important to the southland that, as one writer once quipped, "the history of Southern California is the record of its eternal quest for water, and more water, and still more water."

Not that we aren't preoccupied with the issue of future water supplies for a good reason. In the LA Basin alone, we have approximately 6% of California's habitable land but only .06% of the State's stream flow -- yet we hold over 45% of the State's population. And if the population projections are to be believed, the entire southland is "scheduled" to grow from our current 16 million to over 24 million people. When policy questions are asked about whether Southern California can support this level of growth, the issue of greatest concern is not traffic or air quality or even quality of life, it is water. And the predominant question asked is "where will this water come from?"

Our water fears are not new. Since the pueblo days of Los Angeles, the lack of local water resources has been seen as the primary problem for the southland's economic future. All plans for the development of the region have hinged around schemes to secure new water supplies -- a fact recognized by Carey McWilliams, the pre-eminent historian of the southland, who wrote in 1946 that "God never intended Southern California to be anything but desert...Man has made it what it is."

If southern California's fears about adequate water supplies have shaped its own history and landscape, it has also shaped the landscape of water development throughout the State. Los Angeles invented the rhetoric of water development, with its emphasis on scare tactics about drought and future water shortages. LA also conceived the strategy of reaching with aqueducts hundreds of miles beyond local boundaries to bring home new water supplies. Soon water from the Owens Valley and from other distant places would no longer be viewed as belonging to the regions in which it originated; instead the water would be looked upon by the water developers as their "birth right,"—those are the words that Diane Feinstein, when Mayor of San Francisco, once used to describe that City's Hetch Hetchy Reservoir. At every turn in California's history of water development, Los Angeles and Southern California has led the way.

My purpose today is to talk about how water development in Southern California has profoundly shaped the way we think about our water needs and how those needs can be satisfied—especially given the dramatic population growth projections for our region. My argument is that the traditional way of thinking about water supplies and needs has created a "box" that we—indeed the entire State of California—are stuck in. And, if we do not make an effort to step outside that "box," we are in grave danger of making decisions about our water future that will have two consequences: (1) we will make our region much less able to meet water needs in times of drought and (2) we will needlessly sacrifice important environmental resources in the Sierra Nevada, San Francisco Bay Delta and the Colorado River. In closing, I will make a brief prediction for what I think the future holds.

Let's start by looking at how Southern California developed its water supplies. Originally, Los Angeles had fairly good-sized perennial streams and the first settlements located themselves on their banks. The earliest development of water supplies began in the 1860's with diversions from these streams for irrigation. Next came construction of artesian wells and the development of the region's substantial underground water supplies. But these resources were mined within a single generation through excessive groundwater pumping.

By 1900, the City of Los Angeles was beginning to fear a "future" water famine, based both on real population growth and the dreams of speculators to develop the San Fernando Valley. It was a financial cabal (including Harry Chandler, General Harrison Gray Otis, and Henry Huntington) who conceived in 1905 of the idea that the city of Los Angeles should build a 238 mile aqueduct to tap the waters of the Owens River and bring it to the San Fernando Valley -- an area, at that time, that was not within Los Angeles city limits. To secure the funds to build the aqueduct, a $25,000,000 bond issue was put on the ballot. The Los Angeles Department of Water and Power, the City's water utility, then created an artificial water famine—some claim that the City even dumped its water reserves into its sewer system at night. In fact, LA's water supply became so scarce that, on the eve of the election, the city passed an ordinance forbidding people to water their lawns and gardens. Needless to say, the bond passed, but the aqueduct was built only to the edge of the San Fernando Valley where the terminal point still remains, and the water was initially used to irrigate agricultural land outside of the City boundaries, not to provide domestic water to the residents of Los Angeles. At a later date, Los Angeles annexed the San Fernando Valley to ensure that there was no question about the City's right to use the water for all purposes.

The Owens Aqueduct was completed in 1913. Since that water wasn't going to LA residents and the City's population had continued to grow, LA started to search for more water. In 1915, the Los Angeles Department of Water and Power began work to extend the Owens Valley aqueduct north, and still later, it sponsored the Boulder Dam Act to secure water from the Colorado River, which would require the construction of another aqueduct of 400 miles. In 1928, Los Angeles conceived and helped to create the Metropolitan Water District of Southern California to help finance the Colorado River project. Today MWD's service area extends from Ventura County to the Mexican border, and MWD remains the largest urban water supplier in the nation. In the 1940s, Los Angeles extended its Owens Aqueduct into the Mono Basin. In the 1950s, Los Angeles supported the construction of the State Water Project which would bring water from Northern California into the Southland, and it began work on yet another expansion of the Owens Aqueduct, ultimately doubling its diversions from this region. So, by the 1970s, the southland was connected by a vast network of Federal, State and local dams and aqueducts to water supplies from Northern California and the Colorado River watersheds.

Unfortunately, most of those dams and aqueducts were constructed with little and often no thought to the environmental or local economic consequences of these projects. The classic example is that of LA and the Owens Valley where a thriving agricultural area was returned to sage brush and Owens Lake was reduced to dust. But where Los Angeles led, others in the State followed. We built dam after dam after dam, shifting water from one place to another and decimating the State's natural fisheries and ecological systems. Development of domestic water supplies was considered the "highest and best use" of water in the state, closely followed by agricultural uses. Environmental needs were not part of the equation.

If the State's first fifty years of water development was about the construction of dams and aqueducts to meet LA's and California's growth needs, the second fifty years has been about coping with the environmental problems created by those projects. It was evident by the 1970's that the State faced serious environmental problems, which by the 1980's would become a crisis for both anadramous fisheries and important ecosystems including the San Francisco Bay Delta and Mono Lake. Litigation forced major changes in water law, including the recognition that water projects must provide sufficient releases for fisheries and ecosystem protection. Additional, legislation adopted in the 1970's and 1980's, including the Endangered Species Act, the Clean Air Act and the Clean Water Act, would soon require modification of water projects to help undo some of the environmental damage they had created.

These developments have set the stage for the "clash of the titans" style water fights that we have witnessed in California over the past two decades. California has continued to grow, and—in the pattern first set by Los Angeles—the State agency responsible for planning California's water future, the Department of Water Resources, regularly forecasts draconian water shortages if more dams and aqueducts are not constructed to meet those needs. At the same time, environmental laws are requiring existing water projects to give some water back to the environment. Examples include the Miller-Bradley legislation of 1992, which required 800,000 acre-feet from the federal Central Valley Project to be given back to the Bay-Delta and the recent State decision requiring Los Angeles to raise the level of Mono Lake by substantially reducing its diversions.

So now we can begin to see the outlines of the water box we are in, based on the approach pioneered by the southland to meeting water needs. As we look into the future, we see population and economic growth which will require water. This is projected as a water shortage that must be filled. The water of choice is imported water supplies—and so we reach out to a water rich area to supplement locally limited supplies. And certainly, if we view ourselves as water short, we will also view ourselves as not being able to give up a single drop of our existing supplies to the environment. Sound familiar?

If the southland has helped to shape the box that the State finds itself in, it has also pioneered the way to step outside of the box. Only a lot of people don't know it yet.

Prior to 1990, conservation and local water recycling programs were talked about in general terms as "good public policy," but rarely was any significant money invested by southland water agencies in the development of these programs. The reason was that imported water supplies was the primary strategy by which Southern California would meet its future needs (back to the box thinking), and the focus was on construction of a new 800,000 acre-foot Eastside Reservoir, completion of the State Water Project and keeping all southland aqueducts full.

But the drought that had started in 1987 suddenly intensified in 1989-1990, forcing water agencies in Southern California to require cutbacks in water use -- and for the first time, water "rationing" (that negative term to describe the use of less water) wasn't just talked about, it was imposed. MWD and other water agencies were genuinely concerned about meeting record levels of demand in the Southland, and so moved to aggressively fund and implement water conservation programs along with the development of local southland water supplies (including improved groundwater management and water recycling).

It worked. The response was dramatic: in 1990, MWD water sales peaked at all time high of 2.6 million acre-feet; by 1993, these sales had plummeted to 1.5 million acre-feet—a savings of over 1 million acre-feet. To put that number in perspective, the fight over the San Francisco Bay Delta is about returning around 1-2 million acre-feet to this ecosystem. And MWD sales have remained low, climbing last year to just 1.8 million acre-feet—800,000 acre-feet below the 1990 level.

The unthinkable has happened: today the MWD service area is using about the same amount of water as it used fifteen years ago despite an almost 30% growth in its population. We have fundamentally changed the water demand curve for the Southland; we are supporting more people with less (not more) water.

The City of Los Angeles' experience mirrors that of MWD. Today, as the result of conservation, the city is using over 100,000 acre-feet less than it did in 1990. The level of water use is the same as it was two decades ago, despite a 30% growth in population and the protection of Mono Lake. Clearly we have options for meeting Southern California's water needs that are not dependent upon securing "more" imported water supplies.

This decrease in demand is important, but what is equally if not more impressive is the reliability of the new locally based water supplies that are coming on line as a result of the post-1990 investments. The problem with an imported water system is that it is highly dependent upon storage capacity to carry over snowmelt in order to withstand a lengthy drought—such as the 7-year drought we just experienced. When there is little or no snow, there is little runoff. The longer the drought, the more vulnerable the regions that are dependent upon imported water supplies—and the greater the potential impact on their economies.

In Southern California, many cities responded to the drought by exploring projects that would make them less dependent upon imported water supplies, and improve their capacity to meet their water needs through local water sources they directly controlled. As a result, Department of Water Resources' current water projections (Bulletin 160-98) show that Southern California—out of all the regions of the State—is in one of the best positions to meet its future water demand (even with all of the projected growth) because of the water recycling, groundwater recharge and other local management projects that we have been bringing on line over the past five years.

This kind of thinking has tremendous implications for addressing the big environmental issues that the State faces. Take the Mono Lake example. The usual way of thinking about Mono Lake is that the lake was saved by taking water away from Los Angele—thus, increasing the water problem for the Southland and, by extension, for the San Francisco Bay Delta because more water "would have to be imported from there" or from somewhere else to make up the short fall. This is a classic example of the "old" approach to water in California.

Yet the reality is the solution for Mono Lake included the development of new water projects in Los Angeles that not only replaced the water that Los Angeles would no longer divert from the lake, but actually created more new, more reliable and economically valuable water for the city. Keep in mind that the water available to LA from the Mono Lake watershed varies with the snow pack, so that it did little to help the City during drought periods. Further, the development of conservation programs helped LA to address its sewer system problems and protect Santa Monica Bay by reducing pressure on these antiquated pipes. The programs were implemented by a diverse array of Los Angeles community groups who earned money for their efforts and used these funds to re-invest in our community. And, on top of everything, instead of just advising the city on what it "should" do, the Mono Lake Committee helped the city to secure over 80 million dollars in state and federal funds to make sure that these supplies would be developed.

What was done at Mono Lake can be done elsewhere in the State of California. Funds to implement conservation, demand management, water recycling, conjunctive use and improved groundwater management can be used to develop "new" supplies to ensure that more water can be shared with the San Francisco Bay Delta and other environments to protect these resources at the same time that urban and agricultural water needs are met. We can do this.

What is astounding is that most people in the water world don't "know" about the success of Southern California in "stepping outside the box" to develop new solutions in its eternal quest for water. And, more astounding, those who do know aren't talking about it. Sadly, we are seeing a slow down in overall southland funding of conservation programs. Even investments by MWD in local projects are starting to be deferred. The reason? Because "they may not be needed."

And yet, we are now hearing from the California Department of Water Resources in the just-released Bulletin 160-98 that we are, once again, in a water crisis with a water doomsday looming twenty years from now. What is the primary solution offered by the State to close that gap? You guessed it: more imported water storage and conveyance facilities. What about new conservation and other local programs? For the southland, DWR recommends "deferring" many of these projects because Southern California has already reached the State's goals for these programs!!! Hello? Unbelievably, DWR also recommends that most urban and agricultural conservation programs be "deferred" through-out the State.

What are the consequences of this "old" way of thinking? First, it can only serve to intensify the current conflict among urban, agricultural and environmental interest groups because it implicitly selects "winners" and "losers" in planning for the State's water future. Second, it will make the State's economy more vulnerable -- not less -- to the impact of lengthy droughts because it encourages every sector of the State to be more dependent on imported water supplies and less dependent on locally controlled water supplies. And finally, it creates the danger of the State building environmentally damaging water projects that become the new stranded asset in California -- because these water supplies will be more expensive and less desirable in the long run than locally-developed water conservation and recycling projects. Already, the financial underpinnings of existing projects like Los Banos Grande off-stream storage are being questioned because the water is viewed by some as "being too expensive." Future dams and other concrete projects are unlikely to be constructed unless the public is willing to provide substantial financial subsidies to underwrite the costs. Here's one prediction that is easy to make: be prepared to see more water bond measures -- with hefty dollar investments for concrete -- proposed for California's ballot.

The main stage where California's water future is now being played out is in Sacramento, where California and Federal agencies (known as CalFed) are laying out a strategy for "fixing" the San Francisco Bay Delta and meeting the State's future water needs. The first draft of the CalFed plan and environmental impact report is scheduled to be released this month, so we'll see what they have to say. My hope is that CalFed will present a bold, new water strategy for California that is built upon a foundation of aggressive conservation and water recycling programs and that will be given the time to reshape water demand before new concrete is considered. My fear is that we'll see a "business as usual" program, pushing for more concrete, more dams, and larger conveyance facilities long before water conservation and recycling projects are fully implemented.

Make no mistake about it -- we stand at a crossroads in California's water history. We can follow the old path mapped out by the water mavens of Southern California's past -- or we can create a new one, following the steps Southern California briefly illuminated during the deepest days of the drought.

Let me close with a prediction. I am an optimist by nature so, for my part, I predict that we will "step outside of the box" and we will develop aggressive water conservation and recycling programs that will reshape demand in California. And, if we do this, we will meet the needs of our growing urban and agricultural regions at the same time that we return water to the San Francisco Bay Delta, restore the San Joaquin River, witness the recovery of salmon populations in our lifetime and -- ultimately -- have the water we need to secure the economic and environmental future we want for California.